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"We rate IRIDEX CORP (IRIX) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
- IRIX's revenue growth has slightly outpaced the industry average of 4.3%. Since the same quarter one year prior, revenues slightly increased by 6.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- IRIX has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.17, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for IRIDEX CORP is rather high; currently it is at 50.89%. IRIX has managed to maintain the strong profit margin since the same quarter of last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.84% trails the industry average.
- IRIDEX CORP reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, IRIDEX CORP turned its bottom line around by earning $0.22 versus -$0.02 in the prior year. For the next year, the market is expecting a contraction of 18.2% in earnings ($0.18 versus $0.22).
- The change in net income from the same quarter one year ago has exceeded that of the Health Care Equipment & Supplies industry average, but is less than that of the S&P 500. The net income has decreased by 7.5% when compared to the same quarter one year ago, dropping from $0.53 million to $0.49 million.
- You can view the full analysis from the report here: IRIX Ratings Report